36-7-509. Authority to purchase water rights; lease and sale; disposition of moneys received.

(a) The board of land commissioners is hereby authorized to purchase water rights or proportionate interests in canals, reservoirs or irrigation systems for the purpose of reclaiming school and other granted lands. Lands for which water rights become appurtenant may be leased by the board at a price which will return an equitable income, or may be sold upon the following terms and conditions:

(i) The land shall be offered at public auction at the front door of the courthouse of the county in which the land is situated, after being advertised for four (4) weeks, as required by law;

(ii) Thirty percent (30%) of the purchase price of the land must be paid in cash on the day of sale;

(iii) The purchaser shall, before the sale is consummated, enter into a contract for the purchase of a water right or proportionate interest in the irrigation system which will supply water for the said land, which may be conditioned on not to exceed twenty (20) annual payments with interest at six percent (6%) per annum;

(iv) Delinquent payments shall bear interest at the rate of eight percent (8%) per annum until paid.

(b) Moneys received for the sale of land, and the interest thereon, shall be placed in the proper permanent land fund account in accordance with the purpose for which the land was granted to the state. Moneys received from the sale of water right contracts and the interest thereon shall be turned in to the state treasury to the credit of the general fund.